The Hamptons lettings index for December 2024 revealed that higher interest rates have tied more young tenants into the rental market.
Between 2013 to 2014 and 2023 to 2024, the number of renters aged 45 and over increased by 24%, from 1.43 million to 1.77 million.
Government-backed homeownership schemes, including Help to Buy, helped the number of renters under 45 in Great Britain fall by 1% over the past 10 years, despite population growth.
However, rising mortgage rates have prevented many young, aspiring homeowners from buying homes recently.
The report said Millennials increasingly outnumbered older generations in the rental market, as renters now need to save and earn more to afford a home.
This has slowed the pace of first-time home buying for younger people.
Between 2022 to 2023 and 2023 to 2024, the growth in the private rented sector was driven entirely by those under 45.
This shift added £3.5bn to the rent paid by those under 45 over the past year, taking their total rent payments to £56.2bn in 2024.
They now pay two-thirds (66%) of all rent in Great Britain, up from 64% in 2023.
The number of under-45s renting increased by 149,000 over the last year to 3.4 million, accounting for around 40% of those who bought homes with Help to Buy in the past decade.
The total rent paid by those under 45 rose 59% over the last ten years, reflecting rising rents more than an increase in tenants.
Despite increasing rents, people over 45 paid £716m less in rent than a year ago, primarily due to fewer older renters.
Meanwhile, the number of over-45s renting fell by 79,000 last year.
Over the last decade, the total rent paid by those over 45 almost doubled, rising from £14.7bn to £29.1bn.
By the end of 2024, private tenants in Great Britain paid a record £85.4bn in rent, £2.8bn more than in 2023.
Slow rental growth and limited tenant increases kept this rise modest compared to recent years.
The yearly change was the smallest increase in four years, about a third of the 2023 rise.
60% of the increase was due to rising rents, with the rest from a slightly higher number of renters.
Nationally, the cost of moving into rented homes rose by 2.0% over the last year, the smallest increase since October 2020.
Average rents rose 31.2% in Great Britain since October 2020, from £1,042 to £1,367 per month.
Scotland saw the fastest growth, with new let prices up 5.5% over the past year.
In the Midlands and North of England, rents increased by 5.2% and 4.8%, respectively.
In contrast, Greater London was the only region where rents fell, down 0.2%.
January saw a recovery in stock levels peaking with a 34% year-on-year increase, but the number of homes available was still 13% lower than 2019.
Aneisha Beveridge, head of research at Hamptons, said: “Higher mortgage rates have clipped the wings of many young aspiring homeowners in the last couple of years, meaning Millennials increasingly outnumber older generations in the rental market.
“Renters face saving for longer and earning more to borrow similar amounts of money to buy a home.
Beveridge added: “While new purchases by landlords held up in December, early signs in January suggest the new 5% stamp duty surcharge is starting to bite, which could fuel more rental growth in the coming months.”
